Key Facts
- •Madison Pacific Trust Limited (Madison) acted as Facility Agent and International Security Trustee for loans to GN Terminal Enterprises Ltd (GNT), a Cypriot company.
- •Defendants Groza and Naumenko are ultimate beneficial owners of GNT and guarantors under the loans.
- •GNT defaulted on the loans, leading Madison to initiate LCIA arbitration.
- •A worldwide freezing order (WFO) was granted against the Defendants, which they sought to set aside.
- •Madison alleged a real risk of dissipation of assets by the Defendants, citing various asset transfers and attempts to conceal information.
- •The Defendants argued that Madison was over-secured and that the WFO was unjust and inconvenient.
- •The Defendants also alleged material non-disclosure in Madison's without notice application for the WFO.
Legal Principles
Principles for establishing a real risk of dissipation in freezing order applications.
Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203; Fundo Soberano de Angola v dos Santos [2018] EWHC 2199 (Comm)
Duty of full and frank disclosure in without notice applications for freezing orders.
Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269; Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350; MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2003] EWHC 3418 (Comm); OJSC ANK Yugraneft v Sibir Energy [2008] EWHC 2614 (Ch); The Public Institution for Social Security v Amouzegar [2020] EWHC 122 (Comm); Bracken Partners Ltd. v Gutteridge (2001)
Outcomes
The WFO against the Defendants was maintained.
The court found sufficient evidence of a real risk of dissipation of assets, including asset transfers and attempts to conceal information, outweighing the Defendants' arguments of over-securedness and non-disclosure.